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Gold miners Endeavour and Adamus to merge (ARKO DATTA/REUTERS)
Gold miners Endeavour and Adamus to merge (ARKO DATTA/REUTERS)

Gold miners Endeavour, Adamus to merge Add to ...

International companies Endeavour Mining Corp. and Adamus Resources Ltd. are merging into a new company with ambitions of growing into a mid-tier gold producer, focused on gold mining in West Africa.

“Together, we’re in a better position for growth,” Neil Woodyer, chief executive officer of Endeavour, who will become the chief executive of the combined company, said Monday.

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The two companies trade on Canadian stock markets, and Adamus is also listed on the Australian stock market.

Endeavour will exchange $316-million in shares to Adamus stock holders and spend at least $160-million (U.S.) in cash to reduce its gold hedges and repay an Adamus loan.

After the deal closes, shareholders of Endeavour will own 55 per cent of the yet-to-be-named combined company, with shareholders of Perth, Australia-based Adamus owning 45 per cent.

The combined company plans to double its gold production by the end of 2013 through its current projects and acquisitions, helping the new company step towards its goal of becoming a mid-tier producer.

Both Endeavour and Adamus said their business will grow stronger as the new company will have Adamus’ mine development skills, along with the financial flexibility of Endeavour that can be used towards development and exploration projects.

“Adamus’ mine building experience will enhance delivery of the Agbaou [Ivory Coast]project,” Mr. Woodyer told a conference call.

“The cash is available to continue Endeavour’s programs, and significantly ramp up Adamus’ programs.”

The company will continue to be named Endeavour and the operations will be led out of in Perth, Australia, where Adamus is currently located. Managers will report to new chief operating officer Mark Connelly who comes from that company.

“[We’re looking at]exciting work programs coming up and really getting into the development of Agbaou and further expanding the exploration upside and the growth opportunities for our combined entity,” Mr. Connelly said on the call.

Under the merger deal, Adamus shareholders will receive 0.285 of a share in Endeavour, which is based in the Cayman Islands.

The merged company is forecasting 172,000 ounces of gold production from mines in the West African countries of Burkina Faso and Ghana this year. Output could hit 250,000 by the end of 2013.

Endeavour owns mines in Mali, Burkina Faso, and Ivory Coast, while Adamus’ flagship project is in Ghana.

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